This Week In Bitcoin 06/06/2016

TWIB Reuters announced the Federal Reserve suffered at least 310 data breaches, hacks, fraud, and acts of espionage between 2011 and 2016. The heavily redacted reports were accompanied by interviews with former Fed employees describing how they once worked 5 days straight trying to rectify a problem.

TWIB hundreds of central bankers from around the world gathered at the Fed for a keynote speech by Adam Ludwin, CEO of Chain. Ludwin gave an excellent overview of bitcoin that included a demonstration transaction to Wikimedia. Undoubtedly Ludwin pandered to the yearnings of bankers to secure his speech, so it should come as no surprise that he suggests banks create their own blockchains and mint their own cryptographic tokens. Redditor Dude-Lebowski’s comment was perfect: “Nothing like lipstick on a pig to fix the real problem with central banks.”

Congrats to u/Dude-Lebowski, whois my Bitcoiner Of The Week!Whenthe White House asked the FAA to Oversee Mining Asteroids for gold, he said: “That’s interesting, man. That’s fucking interesting. Asteroids have zero Bitcoin, so we are good at 21 million.”

TWIB Oleg Andreev reopened the bitcoin scaling issue by arguing bitcoin cannot be fairly compared to cash, since cash is centrally-created and employs police to suppress counterfeiters, both of which incur costs on users. This contrasts with gold and bitcoin, both of which are produced de-centrally and cannot be counterfeited. No one knows how many transactions are settled in chunks of gold, but it seems likely that bitcoin’s transaction rate is competitive. Meanwhile, developers smarter than me continue to research and build bitcoin so it can scale to the masses.

Philosophical Interlude

The words ‘value’ and ‘wealth’ are ambiguous and often conflated. ‘Value’ is both a verb (I value food) and a noun (a car has value.) On the other hand, ‘wealth’ applies to money, possessions, and property. To think clearly about money, it’s worth distinguishing it from both ‘value’ and ‘wealth.’ My favorite term is ‘virtual energy,’ borrowed from the physics-definition of energy: that which can do work. While all money can get work done, only bitcoin is created in a process that requires work. This fact makes it less virtual than dollars or euros, IMO.

TWIB the price of bitcoin continued to rebound prompting redditors to opine how to treat the inevitable influx of bitcoin nOObs. While most comments emphasized love and patience, u/Junseth showed characteristic darkness: “When they ask what it’s good for, be honest, tell them drugs, hookers, and speculating.” Unfortunately, the comment was censored, but I’d like to point out that bitcoin is also good for kids who want to buy fake ID’s online, for husbands who want to anonymously buy porn, and for people in Turkey, who this week lost service from PayPal.

To close, TWIB saw perhaps the most beautiful and feel-good bitcoin ad ever, from blockchain.info: